I Don’t Believe in Blockchain

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There are conferences and foundations and consortia and keynotes; it’s
the new hotness! But I looked into blockchain technologies carefully and I’ve
ended up thinking it’s an overpromoted niche sideshow.

First off, I should say that I like blockchain, conceptually.
Provably-immutable append-only data log with transaction validation
based on asymmetric crypto, and (optionally) a Byzantine-generals solution
too! What’s not to like? But I still don’t think the world needs it.

I’m not stuck on the technical objections, for example the laughably
slow transactions-per-second of most real-world blockchain
implementations. Where I work, scaling out horizontally to support a million
TPS is table stakes.

I could maybe get past the socio-political issues, the misguided notion
that in civilized countries, you can route around the legal system with “smart
contracts” (in ad-hoc procedural languages) and algorithmic cryptography.

I could even skate around the huge business contra-indicator: Something on
the order of a billion dollars of venture-capital money has flowed into the
blockchain startup scene. And, what’s come out? I’m not talking about
platforms that are “ready for business” or “proven enterprise-grade” or
“approved by regulatory authorities”, I’m talking about blockchain in
production with jobs depending on it.

But here’s the thing. I’m an old guy: I’ve seen wave after wave of
landscape-shifting technology sweep through the IT space: Personal computers,
Unix, C, the Internet and Web, Java, REST, mobile, public cloud.
And without exception, I observed that they were initially loaded in the back
door by geeks, without asking permission, because they got shit done and
helped people with their jobs.

That’s not happening with blockchain. Not in the slightest. Which is why I
don’t believe in it.

It seems that digital currencies will be useful, but no I don't see it being game changing. It's just continuing cash into the future in various ways. Where I think it might be way more disruptive is for the sharing economy and democracy. Imagine a secure, online, iterative and auditable voting system. We could do more direct democracy if not at a national level at least at a local, organizational or movement level. Imagine an occupy where everyone is able to vote worldwide on what our priorities should be. Or a network of co-ops that are able to coordinate their business activities to take on big companies and raise capital. What about a Democratic Party that actually sets an agenda from all registered democrats. On and on I can imagine more. When disparate networks of people can now effectively organize in a way that the members can trust the results, that could be incredibly powerful. We could end up with nations inside of nations or across nations.

I only got involved in blockchain stuff about 9 months ago, because I had the same impression as you: this is some big finance play by people who want to get rich, and while the basic tech is interesting, what's being built on top of it isn't.

That changed when I took the time to learn about Ethereum. It's very much geek-driven, and if you'll excuse my making the comparison in this company, I feel very much how I imagine Vint Cerf, Jon Postel, Tim Berners-Lee, and many others (yourself included) must have felt when they started working on the building blocks of the internet and internet technologies.

It's still entirely possible it will turn out to be an "overpromoted niche sideshow", or that we'll turn out to be the next Xerox OS, OS/2, or Betamax. But some of the people I most respect for their technical ability, computer science expertise, and all around geekiness are people I've met while working on Etheruem. From where I stand, there's definitely no shortage of geeks.

Blockchain transactions are about 50,000 TIMES slower than a typical credit card transaction. The server power use for 1 transaction is enough electricity to run an average home in the USA for about a day and a half. VISA does about 5,000 transactions per second in busy Christmas shopping season in the USA and their network is suppose to be able to deal with about 10x that amount. So, there is not enough power on Earth to do with blockchain or so-called bitcoin transactions at our current levels.

Never happen. The quest for an ultra secure transaction environment is understandable, but this architecture is junk. And yet, the Venture Capital folks are all over it. Strange. ???

> The server power use for 1 transaction is enough electricity to run an average home in the USA for about a day and a half. VISA does about 5,000 transactions per second in busy Christmas shopping season in the USA and their network is suppose to be able to deal with about 10x that amount. So, there is not enough power on Earth to do with blockchain or so-called bitcoin transactions at our current levels.

That's not actually a valid extrapolation. Proof of work is what consumes the electricity (and alternate architectures that don't consume power are on the way), but more proof of work does not equate to more transaction processing power. One 'network' (bitcoin, litecoin, ethereum etc) has a fixed transaction processing power regardless of the number of machines contributing to the proof of work scheme.

While I basically, there's a fundamental difference between bringing in Linux or MySQL and Blockchain. Linux is an OS, MySQL is a database; upper management doesn't know, or even really care, about what's going on at this level, as long as it works. So Linux et al can be brought in through the back door, under the table, by enthusiastic geeks.

With Blockchain, though, you're talking contracts and money. And that is something that's watched closely. You can tell management "oh, we moved the servers from Solaris to Linux a decade ago. Same time we tossed that clunky proprietary database and put in MySQL." You can't say "Oh, yeah, a couple of years ago we switched all the contracts to Ethereum." That's a change that, by nature, has to get upper management directly involved.

I think your argument is fundamentally right, but it's important to recognize that blockchain touches upper management in a way that Linux and MySQL don't. And that has a huge impact on adoption. It can't happen without people noticing.

I agree with your skeptical stance on crypto currencies, but do not think that all tech has to be spearheaded by early adopting geeks. Counter example I have in mind is HTTPS (and I guess security in general) which is now widely adopted yet was, especially at the beginning, a super pain in the ass to actually implement.

You know what I never believed in? XML, Web Services and pretty much everything you have ever been involved with.

All you guys did was freeload off of committees, reinvent wheels, over-engineer solutions and make lives of developers harder than they should have been ... you and your kind literally set us back some time as a society. There is a level of objectivity here as history has proven that my opinion turned out correct.

I would put blockchains up there with the work done, the past decade, on back-propagation and perceptrons, they are real innovations in IT whose full potential is to be still realised while what you work on is complete turd.

Were SQL databases (not MySQL but the first relational databases) brought in by the "back door"? I suspect not, because of the cost; and originally relational databases were far too slow; but they proved to be far more flexible than the competition (remember CODASYL?) and eventually they became fast enough. (Ironically, we're now seeing NoSQL database as people re-learn the lessons of CODASYL)

But that's about the only counter-example to your argument that I can think of ...

Today I stumbled upon the article of Tim Bray, read it with all comments.

I share your scepticism Tim. Although Blockchain is vulcanic hot here in Europe, (most of) the proponents are made from Geek stuff.

1) Blockchain seems to be just another technologywave - of which I also have seen a few,

1.1) this one claiming that every interaction is a contract - am I right?

2) Technology side - Intuitively I say Performance will be an issue, and the principle that every past transaction can be found will be dodged in order to keep performance up.

3) Market side - I don’t think the world needs it, regardless of Consultants jumping on the bandwagon.

Most of current organisational models and their supporting technologies have been fine tuned over the decades.

4) Not suitable for all situations or to replace all current practices. E.G.: I've heard a geek, sorry, should be Geek, claim that it will replace current Democratic practices. This guy obviously had no notion of 1000s of years of Societal processes that lead to current democratic principles, which cannot be replaced just like that using the latest hype technology.

I initially liked the blockchain idea, but as I have seen more I have all but decided that aside from the possibility of a central bank digital currency, it will never be useful.

Every problem that people propose blockchain for is either one that has been solved or could easily be solved with digital signatures, time stamps, and a central mirrored database.

When asked why blockchain people either mention it being trustless or the high level of resilience. The one "trust " problem---changing data after it is written is hardly a great issue in many of these applications. Digital signatures and linked time stamping would address this well enough anyhow.

The other---high level of resilience is just due to the high number of replications of the data. It would seem more economical to decide explicitly on how many places and how disperse those should be than to use a blockchain.